solow.txt (1.7 KB)

Hello fellows,

I created the attached file to solve a Solow model (log-linearized). However when I run it the following error is presented:

STOCHASTIC_SOLVER: Dynare does not solve purely backward models at higher order.

STOCHASTIC_SOLVER: To circumvent this restriction, you can add a forward-looking dummy equation of the form:

STOCHASTIC_SOLVER: junk=0.9*junk(+1);

I do not want to do workarounds to solve it like the recommendation so I would like to know if someone has a more appropriated solution. thanks

Jose